Financial Crisis? Find the right Credit Counselor - March 30, 2012
Credit Repair? It's not as easy as it sounds! - March 30, 2013
Want to know the secret about "secret shopper" solicitations? - April 5, 2012
Find the right Credit Counselor
Do you constantly worry about your bills?
Are you behind on your mortgage or car note?
Are bill collectors calling you demanding payment?
Are you using credit cards to pay everyday expenses?
Are you not able to save any money for your child's college or your retirement?
You may benefit from the services of a credit counselor. A reputable credit counseling service can work with you and your creditors to set up a workable plan to help resolve your financial problems.
However, your Arkansas Better Business Bureau has become aware of certain companies in the Arkansas market advertising “credit counseling,” “debt consolidation” or other debt relief. These companies typically perform their “services” through a toll free number or over the Internet. Arkansas consumers should be aware of other options that are available to them that typically are just as, if not more, effective than these services and cost less!
First of all, a local counseling service that provides face-to-face counseling with trained counselors is preferable to doing business over the phone or on the Internet. Many credit unions, local colleges, Cooperative Extension Services, and Family Service Agencies provide credit counseling services. Your lender may be willing to assist you as well. A reputable credit counseling service will give you free information about itself and the services it offers on the front end without requiring you to provide any financial information on your part. Once you think you have chosen a counseling service, be sure to check it out with BBB and/or the Arkansas Attorney General.
WHAT TO AVOID
-Any service that requires a fee before it settles your debts or develops a workable plan.
-“Guarantees” any results.
-Claims it can remove accurate negative information from your credit report. This is not true.
- Promises no negative effect on your credit through the use of its program.
- Claims it can stop all collection calls.
-Tells you to quit making payments to your creditors.
Beware of negative advertising that claims that some services “work for the credit card companies” or that taking money from the credit card industry is a “conflict of interest.” Indeed, the Consumer Credit Counseling Service here in Central Arkansas (a division of the Family Service Agency) makes no secret of the fact that it receives donations from creditors.
However, this is not a conflict of interest. Your delinquent debt is a due and collectable debt. The only way to make delinquent unsecured debt go away completely is to obtain a Discharge of that debt from the Bankruptcy Court. But not all consumers want to take that step. So, it is in everyone’s best interests-debtor and creditor alike- that a plan be worked out that provides for some kind of payment on that debt.
Finally, the consumer should realize that there are tax consequences to any form of debt forgiveness. Any debt forgiveness, including forgiveness through a Discharge in a Bankruptcy, is considered income by the Internal Revenue Service and must be reported by the creditor to the IRS with a form 1099.
Apart from health problems, there are no problems more worrisome than money problems. However, your Arkansas BBB reminds you that, if you get the right kind of help, there is a solution to most, if not all, money problems.
Find a BBB Accredited Credit Counselor
Not as easy as it sounds!
Your Arkansas Better Business Bureau is aware of companies that are advertising “credit repair” services in our area through yard signs and radio spots. One of these companies, Credit Solutions, has been advertising on satellite radio. Credit Solutions has an “F” rating with the Dallas Better Business Bureau.
The less scrupulous of these companies typically target consumers who have poor credit histories and they claim the ability to “repair” those credit histories so that a consumer can get a loan, insurance or even a job in exchange for a fee on the front end. The fact of the matter is that no one can remove accurate negative information from a credit report. Most negative information will stay on your credit report for 7 years. A bankruptcy filing will remain for 10. Only the passage of time and an effort on the part of the consumer to do better will remove negative information from a credit report. Any “credit repair” company that says they can remove accurate negative information from your credit report is not telling you the truth!
Your BBB suggests that you consider the following suggestions before you retain a “credit repair” service:
You are not required to pay a “credit repair” company up front. Under the Credit Repair Organizations Act, you are not required to pay until they provide services.
You can perform many of these “credit repair” services yourself. For free! Under the Fair Credit Reporting Act, the consumer reporting companies (Equifax, Experian or TransUnion) or the information provider (typically one of your creditors) must correct inaccurate information in your credit report. Mistakes happen and you have the right to have inaccurate information removed from your credit report. However, you must contact the consumer reporting company and the creditor in writing. Be extremely suspicious of any “credit repair” company that discourages you from taking these steps on your own.
Be equally suspicious of any company that suggests that you apply to the Internal Revenue Service for a Taxpayer Identification Number in order to create a “new identity” for purposes of getting a new credit report. They may also suggest that you “incorporate yourself” for this purpose. Don’t be misled by this terrible advice. It is considered bank fraud to misrepresent yourself or to otherwise submit false information in a credit application. Also, while there are many legitimate reasons to form a company, defrauding your creditors is not one of those reasons. Further, you could be prosecuted for mail and/or wire fraud if you use the mail, the telephone or the Internet to apply for credit using false information of any variety.
Finally, check with your BBB before you retain the services of any credit repair business.
Unfortunately, the only things that can “repair” a credit report are both the passage of time and a new resolve on the part of the consumer to diligently repay his debts on a timely basis. Be extremely suspicious of any “credit repair” company that tells you that there is an easier solution!
The Fair Credit Reporting Act (FCRA) requires the nationwide credit bureaus to provide consumers, upon request, a free copy of their credit report once every 12 months.
If you have a complaint about a “credit repair” company or service, contact your Better Business Bureau, the Arkansas Attorney General’s office or the Federal Trade Commission.
To request a free copy of your credit report visit www.annualcreditreport.com
Want to know the secret about "secret shopper" solicitations?
They may be a scam!"
A “Secret Shopper” scam using the company name W Mart Group claims a Bentonville, AR address and is swindling consumers across the country out of their savings. The Better Business Bureau (BBB) urges consumers to be aware of mystery shopping, work-at-home scams like W Mart Group.
W Mart Group appears to mail consumers across the country a check ranging in amounts from $1500 to $2000 with instructions to wire funds as part of the evaluation process of a retailer’s customer service. One consumer reported the letter instructed her to wire the funds to Madrid.
Generally, participants are advised to go to Wal-Mart or another large retailer to wire the funds, more often than not, the funds are to be wired to an individual, not to the a company. Participants are also instructed to keep a small portion as their compensation.
Better Business Bureau offers tips to help you avoid being swindled by fake check scams:
- Be suspicious of any check from an individual or business that you do not know.
- Does the name and address on the check match the name and address on the envelope?
- Independently verify that the check is drawn from an actual account at a legitimate financial institution.
- Do not rely on the telephone number listed on the check. Use directory assistance to get the telephone number of the financial institution and call them to verify the check.
- When a company claims to be a “Secret Shopper,” like W Mart Group, check with the Mystery Shopper Provider Association at http://www.mysteryshop.org/ to learn more about Mystery Shopping and to confirm the legitimacy of a company.
- Do not rely on the money until the funds have been finally collected by your financial institution. Funds 'available’ is not good enough.
- If you deposit a bogus check or money order in your bank account, keep in mind that you will be held responsible for any money you spend or send to anyone else.
If you receive any form of notification that you are a prize winner in a foreign lottery, sweepstakes or mystery shopping offer, you can take the mailing (with the original envelope it was sent in) to your local post office and turn it into the postmaster general or file a complaint with the United States Postal Inspection Service.
For more information on fake check scams and prevention visit www.fakechecks.org.
Subscribe to BBB’s new scam alerts to keep up with the latest scams, cons and rip offs, www.bbb.org/us/scam-source.